Remittance advice in dental billing
Remittance advice is a payer’s explanation of a payment: which claims and procedures it covers, what was paid, what was adjusted and why, and what each patient owes. It arrives as an electronic ERA, the X12 835 file, or as a paper or PDF EOB, and it carries the check or trace number that ties it to the deposit.
Also calledRAERA835EOB
By Dr. Maya Arnaout, DDS, VP of RevenuePublished 4 min read
What is on a remittance advice?
Whatever the format, a remittance has the same parts:
- The payer, the payment total and how it was paid: EFT, check or virtual card.
- The check number or the EFT trace number.
- Each claim: the patient, the date of service and the payer’s claim number.
- Each procedure line: the CDT code, the billed, allowed and paid amounts, and the adjustments with their CARC and RARC codes.
- What the patient owes: deductible, coinsurance and copay.
- Adjustments to the whole payment, such as a recoupment of an earlier overpayment, or interest.
Dana Whitfield · seen 09/12
D1110 Adult cleaning
CO-45$30.00PR-2$18.00
Billed$120.00Paid$72.00Patient owes$18.00Marcus Lee · seen 09/15
D2392 Two-surface back tooth filling
CO-45$70.00PR-2$28.00
Billed$210.00Paid$112.00Patient owes$28.00Priya Raman · seen 09/18
D0274 Four bitewing x-rays
CO-45$23.00PR-1$62.00
Billed$85.00Paid$0.00Patient owes$62.00
Electronic or paper: what is the difference?
The ERA is a standard file that software can read and post. The paper or PDF EOB holds the same facts in each payer’s own layout, so a person, or a tool that reads documents, has to pull them out first. ERA vs EOB compares the two side by side.
How does a remittance tie to the EFT payment?
Through the trace number. In an 835, the TRN segment carries a reassociation trace number. For an EFT, the payer sends the same number with the deposit through the ACH network, so the bank record and the remittance can be matched. For a check, the check number does the same job.
The bank line usually shows the payer’s name, HCCLAIMPMT (the standard description for a health care claim payment), the amount and the trace number. Match the trace and the amount and you know exactly which claims the deposit paid.
Remittance (835)
TRN*1*0004417729~
3 claims
Total $184.00
Bank deposit
SAMPLE DENTAL PLAN
HCCLAIMPMT
Trace 0004417729
Deposit +$184.00
PMS postings
Dana Whitfield $72.00
Marcus Lee $112.00
Priya Raman $0.00
Posted $184.00
- Trace number matches
- Amount matches
- Every claim posted
Why do the remittance and the money arrive separately?
They travel on different rails. The ERA comes through the clearinghouse; the EFT comes through the bank. They can land on different days, the file before the deposit or after it. Until both are in hand and matched, the payment is not really done.
What if the remittance and the deposit do not match?
- A recoupment: the payer took back an earlier overpayment, so the deposit is smaller than the claims it paid.
- Interest: the payer added prompt-pay interest, which belongs in interest income, not on a patient ledger.
- A zero-pay remittance: every line was denied or applied to the deductible, so there is no deposit at all.
- A virtual card: the money arrives through the card processor, net of the processing fee.
Each of these is a named difference to resolve, not a reason to post a guess. Bank reconciliation covers how to close them out.
How ScoutIQ handles it
ScoutIQ brings remittances in four ways: staff uploads, the ScoutIQ PO Box for paper mail, the clearinghouse and payer portals. Every EFT, check and virtual card is matched to the ERA or EOB that explains it and to the bank deposit, and partial and split payments are flagged instead of silently posted.
Insurance Billing Automation
ERAs and EOBs read; EFT, check and card payments reconciled.
See Insurance Billing Automation